Total Cost of Fixed Asset - IAS 16

Subash (Student. CA Final) (50 Points)

13 October 2010  

Dear Friends,

We bought a vehicle and insured it before bringing it to use.

Now, my concern is, As per IAS 16, do we have to capitalise the insurance charge also on total cost of vehicle ? 

or, it is possible to book insurance charges as direct expense. We prefer this option because It will be beneficial for us to reduce taxable profit.

I seek your suggestion.

 

Thanks & Regards.